General Motors suspends production of Volt electric car

The Associated Press reported last week that General Motors (GM) is putting the brakes on making its electric car model, the Chevrolet Volt, from March 19 to April 23. The decision will idle 1,300 employees at the Detroit-Hamtramck assembly plant. Even though February sales improved over January by about 400 Volts, “we are still seeking to align our production with demand,” GM’s Chris Lee told USA Today.

The Volt is reportedly among the top 10 best-selling alternative energy vehicles in North America based on these latest February sales numbers. However, AP reports that GM missed its goal of selling 10,000 Volts in 2011 by 2,329, which created an oversupply.

What’s also hurting the model is its pricey $41,000 sticker tab, which can’t compete with cheaper fuel-efficient models, according to CBS News auto reporter Jerry Edgerton. Among them are GM’s own Cruze Eco, which sells at an MSRP that starts at $16,800, and the Nissan Leaf, which retails for as low as $27,700. The Nissan Leaf did better in sales than the Volt last year, with more than 9,000 Leafs sold in 2011 in North America. Still, even the Leaf didn’t meet the company’s goal of 20,000 sales.

But if GM can’t get the Volt to jump in sales, the company hopes to get a flash in the market with another electric car model, an electric version of the Chevrolet Spark, which will be launched in 2013, according to GM’s recently filed 2011 10-K. One possible advantage of the Spark over the Volt is safer battery technology. (News of Volt battery fires during crash tests may have cooled both consumer confidence and sales of the vehicle.) GM will use phosphate-based lithium ion for the Spark instead of the lithium-ion battery that powers the Volt. Motor Trend speculates that GM will eventually use the phosphate-based battery in the Volt as well. (Phosphate-based lithium batteries weren’t ready for use when the Volt was first launched for production.)

Ironically published during the same week as the Volt announcement, GM’s recent 10-K includes confirmation of  the company’s commitment to extended range electric vehicles: “We plan to invest heavily in 2012 to support the expansion of our electric vehicle offerings and in-house development and manufacturing capabilities of advanced batteries, electric motors and power control systems.”

We’ll see how consumer response meets GM’s efforts to get the Volt leaping and the Spark glowing.

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Picture by Mariordo59, used under a CC-Share Alike license.

John MacAyeal

John MacAyeal has worked at Hoover's since the era of Hawaiian shirts and Y2K angst (aka the late 90s). Now he's surprised to have survived into this time of skinny jeans and 2012 angst.

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